Government is Learning More about Judicious Supply Chain Management

Subcontracting and supply chain: What government learns from other sectors

Government contracting is as old as government itself. For most of its history, federal contracting was the proverbial 800-pound gorilla, where the golden rule was “He who has the gold, rules.” Of course as budgets and the role of government (particularly federal) in affecting business or commerce declines, the impact of government acquisition needs and initiatives on the larger economy has declined as well. All contracting professionals are taught the importance of a healthy “industrial base,” which tends to be defined as a healthy and competitive group of prime contractors to meet present and future needs. It has historically been used as the rationale for avoiding overly burdensome or onerous acquisition regulations, lest contractors decide to move out of the business and no longer be a supplier.

While government drove research and technology, reduced budgets have accomplished what real or perceived excessive regulation did not—reducing the number of contractors competing for government business. Company mergers and acquisitions, driven by reduced or diversified markets, have reduced the number of firms available to compete for requirements. Government is often a follower rather than a leader in new technologies.Read More …

Supply chain management has become important to government contracting managers. Contact your nearest PTAC to learn more about this and other subcontracting principles.